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TMI Blog1981 (7) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... rivallabhdas, as an individual, and not in the hands of that HUF. 2. Whether the property which devolved on Shri Shrivallabhdas on the death of his father, Gokalchand, also constituted the HUF property consisting of his own branch including his sons. Facts of the case, as stated by the Tribunal, are as follows: Assessment year in question is 1974-75. Assessee, Shrivallabhdas Modani, originally represented his HUF, consisting of himself, his wife, sons and unmarried daughters (for reference " the bigger HUF "). In 1962 there was a partition of the family property between Shrivallabhdas Modani and his sons. After the said partition Shrivallabhdas Modani, his wife and unmarried daughters constituted an HUF, hereinafter described as " the sma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also liable to be assessed in his status as " individual ". The ITO further held that Shrivallabhdas Modani could not blend the property, to which he succeeded after his father's death, with the property of the bigger HUF consisting of himself and his sons because after the partition of 1962 the coparcenary had come to an end and it could not be re-created. Accordingly, the income from M/s. Gokalchand Modani & Sons was assessed in the hands of the assessee treating his status as " individual ". On appeal, the AAC modified the assessment order holding that after partition between Shrivallabhdas and his sons in the year 1962, Shrivallabhdas, his wife and unmarried daughters constituted a smaller HUF and the income of the firm, M/s. Shriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 ITR 293. The ratio of these decisions fully applies to the facts of the present case. The Appellate Tribunal fell into an error by holding that merely because after partition Shrivallabhdas Modani's power to alienate the property was untrammelled, the property became his absolute property. The Tribunal ignored the law laid down by the Supreme Court in the cases referred to above. We, therefore, answer question No. 1 in the negative as follows, The Tribunal was wrong in holding that the income of the assessee returned in the status of an HUF, consisting of himself and his wife, was liable to be assessed in his hands as " individual " and not in the hands of the HUF. Question No. 2 presents some difficulty because there is a sharp cleavage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which existed before the passing of the Succession Act, continued to be operative after the Act. According to the learned counsel, the property inherited by the assessee from his father in the year 1968 was ancestral property wherein his sons had right by birth in accordance with the precepts of the Hindu law. Learned counsel for the Department, however, repelled this argument and contended that the position about intestate succession on the death of a Hindu has undergone a sea change after the coming into force of the Hindu Succession Act, 1956, and succession to the estate of a Hindu dying intestate will be governed by s. 8 of the Act and not by the earlier Hindu law. We have, therefore, to examine whether the Hindu Succession Act h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1956, without referring to the Hindu law which governed succession before the passing of the Act. Section 4 of the Hindu Succession Act is the overriding provision. It clearly lays down that " save as expressly provided in the Act, any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the commencement of the Act shall cease to have effect with respect to any matter for which provision is made in this Act". Section 8 of the Hindu Succession Act lays down the scheme of succession to the property of a Hindu dying intestate. The schedule classifies the heirs on whom such property shall devolve. Those specified in class take simultaneously to the exclusion of all other heirs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in CIT v. Dr. Babubhai Mansukhbhai [1977] 108 ITR 417, which was decided on September 19, 1975. Therefore, when the same question again came up before the Madras High Court in Karuppan Chettiar's case [1978] 114 ITR 523 [FB] it was referred to the Full Bench of the court. The court dissented from the Gujarat view and, following the Allahabad High Court's decision in Ram Rakshpal's case [1964] 67 ITR 164 (All), held that by the reason of s. 8 of the Hindu Succession Act, 1956, the son's son gets excluded and the son alone inherits the property to the exclusion of his son. The Gujarat High Court in Babubhai's case [1977] 108 ITR 417, dissented from the view of the Allahabad High Court in Ram Rakshpal case [1968] 67 ITR 164 (All) and obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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